State oil giant Orlen calls on Poles not to hoard fuel amid pre-election price drop

Polish state energy giant Orlen has appealed to the public not to hoard fuel amid a drop in prices at petrol stations ahead of October’s elections. The firm has been accused of artificially lowering prices to help the government’s re-election bid, but it denies such claims.

Recent low prices have encouraged drivers to fill up not only their vehicles but also in many cases fuel cans. There have also been reports of Czech motorists crossing the border to stock up on cheaper fuel in Poland. Some private operators, such as Shell, have introduced restrictions at some of their stations.

In a video posted on social media today, Orlen’s communications director, Adam Kasprzyk, said that the firm “urges people not to buy fuel to stock up so that the logistics forces that operate the stations can work normally”.

He assured the public that Poland “is not threatened by a fuel shortage scenario or a sudden price increase”. Some analysts have warned that Orlen will be forced to raise prices after the elections on 15 October.

Informacja: Dostawy paliw na stacje ORLEN przebiegają bez zakłóceń. pic.twitter.com/D0fzjVZvul

— Biuro Prasowe ORLEN (@b_prasoweORLEN) September 26, 2023

But the firm – whose CEO, Daniel Obajtek, has declared that he hopes the ruling party win re-election and has donated to its campaign – denies any political motivation behind the recent price drop, which comes despite rising global oil prices and a weakening zloty. Prices have been rising in other parts of Europe.

Orlen attributes the low fuel prices to its recent mergers with another state-owned oil refiner, Lotos, with gas producer PGNiG and electricity provider Energa, which allowed the company to profit from synergies. Orlen also pointed to the optimisation of purchasing processes and favourable purchasing formulas.

However, an unnamed source at the European Commission told financial news service Money.pl that Brussels is “watching” the situation and could “start proceedings” if they believe that Orlen’s actions are threatening market competition.

UE widzi, co dzieje się z cenami paliw w Polsce. – Przyglądamy się. Możemy rozpocząć postępowanie w tej sprawie. Komisja jest zobowiązana do ochrony konkurencji wewnątrz jednolitego rynku UE – słyszymy ze źródeł zbliżonych do Komisji Europejskiej. https://t.co/qaWjp1p4HM

— Paweł Kapusta (@pawel_kapusta) September 25, 2023

Many Poles also appear sceptical that prices will remain low, and a number of news articles have appeared online advising how to store fuel safely. Such stockpiling may cause shortages, notes Robert Tomaszewski, an analyst at a think tank Polityka Insight

“My industry source says that there is currently a shortage of around 15% of diesel on the market,” he tweeted. “Not because the fuel is physically absent (because it isn’t!), but wholesalers are finding it unprofitable to bring it to the market due to depressed retail prices.”

At the same time, he stated, companies cannot keep up with fuel deliveries to stations “because demand is so high,” with the situation being the worst in the border regions.

“The situation is set to get worse as Orlen is not going to abandon its pricing policy. Prices are going further downwards. I would expect the climax on Friday 13 October,” said Tomaszewski.

The Rzeczpospilita daily reports that some other fuel station operators, such as Shell, have introduced restrictions such as limiting single purchases to a maximum of 100 litres. The rationing was introduced at the end of last week due to “stock shortages” and is expected to last until further notice, the newspaper said.

For more on Poland’s falling petrol prices – which have resulted in Czech motorists crossing the border to tank up – see our report from Friday.

Orlen denies claims it has artificially lowered prices to help the government win re-election https://t.co/qgLL5o7qG6

— Notes from Poland 🇵🇱 (@notesfrompoland) September 24, 2023

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Main image credit: CEZARY ASZKIELOWICZ / Agencja Wyborcza.pl